Budget 2019: Angel Tax, Other Issues Of Startups Are Now History, Says Piyush Goyal
The government has proposed many incentives, including an arrangement for resolution of pending assessments of income tax cases.
Commerce and Industry Minister Piyush Goyal Friday said steps announced in the budget for startups would further strengthen ecosystem for budding entrepreneurs and would make the angel tax issue a history.
Angel tax and other tax-related issues of start-ups "are now history", he told PTI. He said the measures proposed in the budget will give a relief to budding entrepreneurs. “Old issues will now be sorted out through this budget announcements and we are well poised to now fast scale of startup ecosystem,” the minister said.
The government has proposed a host of incentives, including a special arrangement for resolution of pending assessments of income tax cases, with a view to encourage startups. Finance Minister Nirmala Sitharaman in her budget speech said startups in India are taking firm roots and their continued growth needs to be encouraged.
“To resolve the so-called 'angel tax' issue, the startups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums," she said. The issue of establishing the identity of the investor and source of his/her funds will be resolved by putting in place a mechanism of e-verification.
With this, funds raised by startups will not require any kind of scrutiny from the income tax department, she said. An angel investor puts funds in a start-up when it is setting up its business in the competitive market. Normally, about 300-400 startups get angel funding in a year. Their investment in a unit ranges between Rs 15 lakh and Rs 4 crore. The finance minister also proposed to relax certain conditions for carry forward and set-off of losses in the case of startups.